Mumbai ITAT : ITA No.7513/M/2010
Following the order of the Bombay High Court in the case of Vodafone India [361 ITR 531 (Bom.)], the Mumbai Tribunal has held that no adjustment can be made in the case of an international transaction where the tax rate of the country of the Associated Enterprise is higher than the tax rate in India.
The Tribunal further held that where the assessee is enjoying a tax holiday such as those under Sec. 10A or Sec. 80HHE, there can not be a motive for avoidance of tax and hence transfer pricing adjustment cannot be made.
The Tribunal held that the judgement passed by the jurisdictional High Court in the case of Vodafone India shall supercede the order passed by the Special Bench of the Bangalore ITAT.
Posted on: 09-11-2015